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5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
What is Loot NFT?
James Duchenne
Apr 25 · 3 min read
We’re a gamified, patent pending, auction platform where members use BUNs, tokens of
limited supply, to bid for NFTs.
Membership is by invitation only.
Anyone signing up to Loot NFT must first have their email address whitelisted before 30
June, 2021. Thereafter, a member must whitelist their invitee’s email addresses for them
to sign up.
To whitelist now go to lootnft.io.
https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 1/6
5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
First whitelisting page as of 23 April 2021.
Get BUNs. Bid. Re-list. Climb status levels.
You’ll need to buy BUNs (with USDC) when you sign up. BUNs are used to bid for NFTs
at Battle-Bidding auctions, or to redeem for services.
https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 2/6
5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
All BUNs are purchased with USD Coin (USDC).
BUNs you’ve purchased show up in your account.
You can now join a time-limited auction by paying 5 BUNs as a joining fee (this fee
increases over time making it more expensive for late comers to join that auction).
Thereafter, use 1 BUN at a time to Battle Bid. You can’t outbid yourself and the last
member to bid when the timer expires, receives the NFT. BUNs used to bid are spent
(and debited from your account, i.e., the auction is a pay-to-bid style auction).
https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 3/6
5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
Each NFT is curated, unique, and part of a themed set of 5 NFTs. Collect the full set to
unlock an amazing mystery gift (only offered when a set is first put together). Collect a
simple majority of a set and unlock a degree (a status level granting more BUN rewards
for participating).
You can also unlock some other badges depending on when you sign up.
You can sell NFTs you’ve won for auction and get paid for the sale in USDC (less our
commissions). Conditions apply.
https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 4/6
5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
Sneak peak of current platform (in testing mode).
A member’s goal should be to achieve the 5th degree (collecting a simple majority of 5
different sets).
The result of member’s bidding on Loot NFT is for creators anywhere (whose work was
NFT’d and listed for auction), known and unknown, to get recognized and paid for their
creativity and talent.
Here’s a one-page overview of the whole Loot NFT ecosystem below (to download the
pdf, click here):
https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 5/6
5/10/2021 What is Loot NFT?. We’re a gamified, patent pending… | by James Duchenne | lootnft | Apr, 2021 | Medium
Leave your questions below for us to answer.
Loot NFT.
Basic Topics Auctions Nfts Innovation How To
About Help Legal
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https://medium.com/lootnft/what-is-loot-nft-a1dc7bb46b69 6/6
5/10/2021 Simple Design, Enormous Possibilities | by James Duchenne | lootnft | Apr, 2021 | Medium
Simple Design, Enormous Possibilities
James Duchenne
Apr 29 · 3 min read
We’ve already produced vast amounts of documentation addressing the features of the
Loot NFT platform, together with some thought-provoking discussions about the impact
of its design.
This can be overwhelming and we can easily forget that, at the core, Loot NFT has a very
simple structure. In this short article, I’ll showcase the basic building blocks that make
up the Loot NFT design and business model.
From a bird’s eye view here’s how Loot NFT works.
https://medium.com/lootnft/simple-design-enormous-possibilities-6dd6aa1e6458 1/3
5/10/2021 Simple Design, Enormous Possibilities | by James Duchenne | lootnft | Apr, 2021 | Medium
1. People sign up with whitelisted email addresses, then purchase BUNs from Loot
NFT. Thereafter, they can buy BUNs at any time as long as their account does not go
over 50,000 BUNs. BUNs are sold in packs of 25 for 5 USDC.
2. BUNs are used in a pay-to-bid style to win NFTs on auction.
3. All BUNs spent by members are sent to the Oven (a time-locked wallet). However,
the Oven only receives BUNs bid at auctions once they conclude. The Oven
distributes BUNs back every Sunday at 00:00 UTC to members (rewards) and to
Loot NFT (for resale to members).
4. Once members win an NFT, they can resell them at auction, or transfer them off-site.
5. All NFTs are part of a themed set each containing 5 NFTs. A member collecting a
simple majority of a set gets a degree (status level) which gives them more BUN
rewards than what they would otherwise have had from the Oven distribution. If
members collect a full set (all NFTs in a set), they get a mystery gift.
6. Members that achieve 5 degrees complete the Loot NFT challenge.
Below is a depiction of the member bid panels in the battle bidding arena (left) and the
section they use to re-list their NFTs for auction (right).
https://medium.com/lootnft/simple-design-enormous-possibilities-6dd6aa1e6458 2/3
5/10/2021 Simple Design, Enormous Possibilities | by James Duchenne | lootnft | Apr, 2021 | Medium
The menus of the site are straightforward as well.
I hope the above makes it simple for anyone wanting to participate on Loot NFT and to
understand how it works. The outcomes that come out of this simple design are another
matter altogether; once you go down the rabbit hole it can feel like watching
Christopher Nolan’s movie, Inception.
Loot NFT.
Basic Topics How To Auctions Nfts Games
About Help Legal
Get the Medium app
https://medium.com/lootnft/simple-design-enormous-possibilities-6dd6aa1e6458 3/3
5/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
Q&As from Peer-Review: A deep dive into NFT
listings, account caps, D-Day and more…
James Duchenne
May 3 · 9 min read
As part of our launch, we allocated time for peer-review of our information. This is so a
fresh pair of eyes can tell us if they see any issues with our design or if additional
clarifications are required. We can then prudently consider whether we need to make
changes or update our communication.
I write this article to address the queries of Ishant Ayadassen (one of our reviewers)
regarding how we list NFTs, deal with maximum caps, and achieve a level playing field
for all members, in addition to clarifications surrounding what we’ve dubbed the “D-Day
Event”.
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 1/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
It’s obvious that those diving deep into our design will come up with questions that
maybe we might have addressed too briefly or simply missed. However, I consider some
of the questions Ishant had to be important enough to address. I list these out below.
1. Do you have a schedule for the listing of NFTs?
Absolutely.
We intend to list new NFTs for auction on a daily basis with a set end time. Six hours
before the end time, the joining fee of 5 BUNs doubles to 10 BUNs. Since each bid
received in the last 15 seconds resets the timer, this means that an auction could go into
overtime beyond the original end time. The joining fee will double every 6 hours in
overtime until it reaches 40,960 BUNs (approximately 78 hours).
Timeline of new (first-time) NFT listings. Click to enlarge.
Re-listed auctions (i.e., those NFTs that are re-listed for sale by members) can be listed at
any time and will have 170 hours to achieve a reserve price. When a reserve is met, the
battle bidding auction starts with a timer of 24 hours to allow all people to join in. The
reserve is added to the auction receipt. If it doesn’t get to the reserve, the auction is
delisted. To note, any member can join in a re-listed auction at any time by paying the
same share of the reserve price that prior members paid to join that auction.
2. What is the process to bid?
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 2/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
First, members must pay a joining fee to bid on a new (first-time listed) NFT, or pledge
BUNs to meet a member’s share of a reserve price for re-listed NFTs. If the reserve is not
met (i.e., the auction doesn’t go ahead), the pledged BUNs are returned to the member.
Second, members must allocate an amount they’re willing to spend on each auction.
They can “clear” that amount at any time and the balance is returned to their account, or
add more to it.
An example of the bidding control panel is shown below.
Once members have allocated an amount they’d like to bid for an auction, they can then
set the bid bot or bid manually, or both. If the amount is entirely consumed they will
need to re-allocate more to continue bidding. This is good for members to control the
amount they’ve allocated per auction.
Lastly, members can bid on one or multiple auctions at the same time.
3. Do all bids get sent to the Oven automatically from biddings?
No.
BUNs for an auction only get credited to the Oven when the auction concludes. In the
meantime, the Oven will accumulate BUNs spent for other services, such as whitelisting
email addresses of invitees or of public cryptographic addresses, NFT Re-listing fees, etc.
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 3/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
4. What’s a D-Day scenario?
D-day is a theoretical event where Loot NFT has no more BUNs to sell and the Oven has
not redistributed BUNs yet to the Loot NFT ecosystem. As D-Day approaches, BUNs
become more scarce and the last members that have BUNs (as long as they have joined
an auction), are the ones that can win the NFTs.
If all auctions are still in progress on the platform at that time, this could result in a
cascade of auctions ending, filling up the Oven as they do so. However, since the Oven
only distributes at 00:00 UTC on Sunday, there may be a situation where members have
to wait until that time to participate again (it also means that no new members can sign
up until that time).
That’s D-Day.
5. How long do we have to wait for a D-Day?
As I said above, D-Day is theoretical and dependent on several factors, such as how long
an auction lasts, how many members are bidding in the last 15 seconds, how many NFTs
are on auction, what the re-listing reserves are, how many BUNs are off-platform, or
lost, or “hodled,” etc. Technically, our models show that it is possible in a 21-day period,
but that’s a very big “if”.
6. Doesn’t a D-Day scenario mean that new auctions will only be available to
members that have kept BUNs to pay the joining fee before they lockup to other
participants?
No.
All of our listings end weekly following an Oven release. It means that members can still
join an auction at 5 BUNs before the joining fee doubles (only in first-listing scenarios).
7. So, you’ve capped your revenues?
Yes and no.
There are other avenues for growth, such as creating Loot NFT sub-sites on a country
basis to help creators there; they could then gravitate to the Loot NFT site, much like the
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 4/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
football world cup which has different qualifying regions before getting to the world cup.
These sub-sites could use tokens with different tokenomics but the same or similar
approaches.
8. About the cap of 50,000 per account… how do you stop members from buying
from Loot NFT and sending them off-site and purchasing more so that they have
more than 50,000 BUNs combined?
A member’s cap is the sum of all BUNs they’ve sent off-site (since BUNs are blockchain
assets) and their balance on Loot NFT (which includes amount allocated in live
auctions). Hence, they are not be able to buy more from Loot NFT unless they use their
BUNs on Loot NFT. In order to send BUNs off site, they’re also required to pass our KYC
checks, which stops multiple accounts from being used to buy BUNs and consolidate off
of Loot NFT.
9. Can a member buy BUNs at any time or is the cap of 50,000 BUNs a onetime
lifetime cap?
Members may buy BUNs at any time and the cap is a hard cap at any one time.
For e.g., if John buys 50,000 BUNs and spends 1,000 BUNs in an auction, he will be able to
purchase up to 1,000 BUNs.
A couple of important notes here:
(a) BUNs are sold in packs of 25 BUNs, which means that if a member spends 1 BUN at
an auction and wants to buy BUNs, he/she won’t be able to do so. That member must
make room for at least 1 pack.
(b) If a member has allocated BUNs to auctions or pledged to a re-listing, these BUNs are
treated as if they hadn’t left the account of that member (since they still have control of
those BUNs).
For e.g., John has 50,000 BUNs. He allocates 5,000 BUNs to an auction. His account
balance shows 45,000 BUNs. He tries to purchase more BUNs. He can’t until he returns the
BUNs from the auction. For reserve pledges, these amounts are locked-in and can’t be
cancelled. It is only returned if the auction doesn’t go ahead.
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 5/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
10. If I’ve sent 50,000 BUNs off site and I’m not able to sign up unless I buy BUNs,
but they’re all off-site and I can’t buy more, what do I do?
Send the BUNs back to Loot NFT.
Each member has a public BUN address on Loot NFT. Once the off-site BUNs are
received, you can log in. If you don’t know your Loot NFT public BUN address after your
email One-Time-Password confirmation (in this specific event) you’ll be presented
automatically with your account’s public BUN address.
11. Can members send in BUNs from another non-whitelisted public BUN address
to their account?
Yes, but any amounts over their 50,000 BUN cap (which includes BUNs held on Loot
NFT) will be sent to the Oven for re-distribution to the Loot NFT ecosystem. Members
must therefore be mindful not to send more than the cap they’re entitled to, otherwise
they will lose the additional amount.
12. Are there any additional benefits to more BUNs out of the Oven to holding a
degree?
Maybe. We may give degree holders a benefit that raise their maximum BUN cap from
50,000 BUNs by 10% (1st degree), 20% (2nd degree), 40% (3rd degree), 70% (4th
degree), and 110% (5th degree) to make room for the increase in rewards those
members receive.
13. If you add more NFTs everyday and you have a limited supply, doesn’t that
mean that over time the remaining NFTs get valued less?
That’s a great question and the answer is that we don’t know. I generally don’t talk about
the future value of NFTs as I don’t want my words to be taken out of context, but I think
that in this instance I can list certain aspects that may affect an NFTs value for general
informational purposes.
For fungible tokens valued in a pair to another, inflating one token in relation to the
other generally means that the inflated one loses value. In our case, we are adding more
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 6/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
NFTs while keeping BUNs fixed. This is more like valuing gold (or a painting) with
respect to an inflationary US dollar, although even that is a stretch, but you get the idea.
On Loot NFT, there’s a few things that need to be taken in consideration:
(a) The arena has at a maximum of 20 first-listed NFTs and 20 re-listed NFTs at the same
time (40 NFTs on auction); this proportion of first-time/re-lists NFTs may be varied
depending on participation. All other items wait on a first come, first serve basis in the
“Upcoming” section. Once a spot frees up in the arena, that next NFT goes on auction.
This focuses the attention of the bidder only on a few items at any one time.
(b) Members that want to complete sets have to hold on to a number of NFTs, thus
effectively taking them out of circulation, temporarily. For e.g., if a member has a 3/5
they may want to get to the 5/5 to get the mystery gift.
(c) Some NFTs may attract more attention than others, such as if we have a custom car
by a particular creator in a set of mechanical objects.
(d) NFTs may not be sold by “hodlers” since NFTs may have value in themselves to those
members.
(e) NFTs can be sent off-site. This reduces the amount of NFTs in the ecosystem and can
balance out with the incoming NFTs such that certain NFTs may have more value off-
Loot NFT than on it to a member. This means that a fresh contingent of NFTs can take
the spots of the older ones.
(f) The number of members on the Loot NFT is relevant to the bidding fervor at auction.
(g) In a decentralized ecosystem, we will transition to pricing the BUNs with a set
amount of ADA (Cardano Native Token); for example 1 pack for 5 ADA - to note we
originally intended to launch by selling BUNs to ADA, before replacing it with USDC for
several practical reasons. Hence, in relative fiat terms, BUNs may fluctuate in the future
with the price of ADA.
Concluding Remarks
https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 7/85/10/2021 Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more… | by James Duchenne | lootnft | May, 2021 | Medium
I appreciate that the above is not for everyone, hence why I’ve posted it in the complex
section for those that want to go down the rabbit hole.
For everyone else, it’s simple — there are 50,000 BUNs cap per member, which you use
to participate at auction. Simply pay the joining fee, set the amount you want to allocate
to bid per auction, bid to get NFTs, collect sets, and have fun competing in the arena.
Lastly, I want to thank Ishant for seeking clarification on these items, and prompting me
to expand further.
Loot NFT
Complex Topics Nfts Auctions Software Engineering Membership Rules
About Help Legal
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https://medium.com/lootnft/q-as-from-peer-review-a-deep-dive-into-nft-listings-account-caps-d-day-and-more-f72c09ee095d 8/85/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
NFTs as Securities: A Review of Arkonis
Capital’s Letter to the SEC
James Duchenne
Apr 21 · 8 min read
I list for reference the letter from Arkonis Capital’s parent company, Sustainable
Holdings here.
I am glad that Arkonis has brought the issue of whether an NFT is a security to the
forefront in their letter to the SEC; I believe that these are important issues to be
addressed to shed light on a potential grey area (especially, after the backlash of the
2017 ICO craze). Obviously, being a player in the NFT field, we are attuned to
developments that may impact our business and contribute our knowledge as much as
possible to guide this field.
As you may be aware, Loot NFT operates in both the fungible and
non-fungible token arena. Here’s where we stand.
Let’s take the matter of the BUN as a cryptographic token first.
https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 1/75/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
(a) The BUN is a digital voucher that only has intrinsic value within our platform.
Similar to a game credit, it has a fixed price of 0.20 USDC and is consumed for services
and as a bid unit in pay-per-bid Battle Bidding auctions (much like penny auction site,
Quibids). It is also used in the fabric of our site’s design to regulate membership intakes,
rewards, and more.
(b) We provide disclaimers regarding the BUN on our website and all of our
documentation (in particular our Telegram group) as we don’t live in a vacuum: it is a
common assumption that those purchasing blockchain tokens expect secondary market
listings, trading, and profits. As such, our disclaimers (which amongst other things state
that we will not list the tokens, participate in any secondary market activities, or
advertise anything related to the same) aims to dispel such notions promptly and
decisively.
(c) To prove the point, we have no token allocations for team members, advisors, third
parties or, for that matter, even company reserves; the BUN is simply used on our
platform, and it is in our commercial interest to sell as many as we can and ensure
they’re used (so they can recirculate back to us for resale)! Nothing more. In addition, the
sales of BUNs lead to revenues that are taxable like any goods and services.
(d) Our product is operational from day one, and we’re adequately funded to run our
business. We have not accepted any investments prior to the launch and operation of our
product. Our goal is to provide a gamified auction platform for the benefit of creators
and our members, not to get our members or anyone else to invest in our operations. It is
illogical to think otherwise.
(e) For our exit strategy (the destiny of which we control without outside influence),
we’ve made no secret that we intend to migrate all (as far as practicable) centralized
modules of our software to a decentralized autonomous organization (or DAO). At that
point, we plan to retire our company, and get royalty-like revenues from the DAO as long
as the platform keeps being used by, and of value to, our members. In this process, we
aim to entrust the governance and administrative matters of running the day-to-day
operations to a foundation, our members, and the blockchain.
(f) The BUN can be custodied by members themselves if they so chose.
https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 2/75/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
On this note, I remember that my data was hacked in the US healthcare breach a couple of
years back and if I had been given the choice to hold the keys to my data (as an NFT) this
could have been prevented; the technology exists to do this today and migrate from
centralized solutions that act as honey pots.
This is one of the reasons we believe our members should be able to secure their BUNs.
Note that it is not in our immediate commercial interest to have BUNs outside of our
platform sitting on the sidelines (and not being recirculated back to us) but that is a nod
to what we think is in the best interest of our members long term. In turn, it is clear that
we can’t stop
peer-to-peer transfers; that is the tradeoff. In this context, we’ve capped the maximum
amount of BUNs a member can have in their account to 50,000 BUNs (or USD10,000)
which includes both the amount on Loot NFT and in their off-site wallets. They are not
able to purchase more unless they’ve used these on Loot NFT to make room under that
cap. Further, it is our policy not to promote or address these matters as people can read
into, and distort, our words; our focus is to run a sound business.
Thus, we believe that our use and utility of the BUN is not in question.
Now, I turn to the matter which was brought forward by Arkonis.
This is (from a legal perspective at least) a fascinating theoretical and real world test for
the SEC to further unpack the Howey Test.
As Arkonis points out, the SEC viewed that,
“…the main issue in analyzing a digital asset under the Howey Test is whether a purchaser
has a reasonable expectation of profits (or other financial returns} derived from the efforts
of others.”
To understand why, let’s consider the case of an NFT representing the ownership of a
unique art work.
As it is non-fungible, it achieves value in an asymmetric context (i.e., the NFT must be
matched with a specific willing buyer and its re-sale must seek a willing buyer in the
same way). For example, is the Beeple that sold for $69m likely to find another buyer for
that amount or more? Anyone’s guess. However, in a highly liquid market of fungibles
https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 3/75/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
(like Bitcoin or the US dollar), it is possible to find a buyer of 1 bitcoin for a generally
assumed market price, since 1 bitcoin is the same as the other bitcoins.
Hence, if art-related NFTs achieve a particular value, it may not be the price that
someone else in the future is wiling to pay for it (and in fact, that is likely, in the majority
of cases, not to happen due to its non-fungibility), making the argument of an
expectation of profit, a bizarre contortion of reality.
For this reason, I posit that there must be two types of NFTs:
(a) A right granted to its owner to expect an external profit inherently from the benefit
of owning the NFT (for example, an NFT representing a legal right to oil production
revenues for a particular plot of land). Here, the NFT is tainted as a security based on
that underlying grant.
(b) A right to, or actual ownership of, a creation that doesn’t in itself provide any
expectation of revenues but that may be valued at a price that a willing purchaser is
willing to pay for it in the future.
We’ll call the above type “a” and “b” for simplicity.
Both shouldn’t be confused. Where would we stop? Baseball card collectibles as NFTs
being securities? Vintage cars as NFTs being securities? No, I contend that these are not
securities but creations treated as goods.
Further, while I’m in general agreement with their statement, I do think that Arkonis
oversimplifies the matter when they write:
“fractionalized NFTs could be considered a security… While NFTs are meant to be non-
fungible, fractional NFTs that allow numerous purchasers to acquire a partial ownership
interest in the NFT, increases the likelihood the NFT could be deemed a security.”
This ought to be nuanced.
For e.g., owners that have pooled their resources together (syndicated) to buy an asset in the
expectation of profits, I believe would meet the prongs of the Howey Test and be a security
because of the scheme (for e.g., several such schemes exist like buying a share of a painting,
https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 4/75/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
a rare collectible, etc.). However, this has nothing to do with the NFT itself but a common
enterprise for profit (the NFT is simply the vehicle to achieve that aim).
From a blockchain perspective, this is like having fungible tokens that can be invested
into to buy an NFT. Capital is raised by the fungible token sale in a scheme to buy a non-
fungible token. But if one person were to buy the NFT absent of the scheme, unless it is a
type “a” NFT, it can’t be a security.
Further, a person that collects a set of individual NFTs and combining them to sell as a
pack for a higher price (by definition fractionalized, in reverse) should not be a security
(unless, a type “a” NFT). In fact, this is like combining an orange, a strawberry, and an
apple together to make a fruit pack whose value by default would be expected to be
higher as (a) it combines three products each having a singular value, and (b) it
becomes more desirable to a wiling purchaser because of the variety of fruits offered in
the pack.
It is interesting that Arkonic also notes the SEC’s following remarks:
“Price appreciation resulting solely from external market forces (such as general
inflationary trends or the economy) impacting the supply and demand for an underlying
asset generally is not considered ‘profit’ under the Howey Test.”
I find this quote to be pertinent but ill-suited to apply to type “b” NFTs because the latter
deals with finding a market for a unique creation, which is not affected by external
market forces but rather one driven by desirability in the eye of the beholder (i.e., if
someone wants to buy a Banksi, these external market forces generally will not apply).
Lastly, it should be obvious by now that at scale, finding the right buyer and seller is not
like going through an order book for fungible tokens on Binance. It is only achievable
through an auction process. Thus, auction houses are the NFT “exchanges” much like
the Binance’s or Uniswap’s are exchanges in the fungible tokens sector. However, this is
where the analogy ends as they are both extremely different in how they operate their
compliance obligations, although it is possible to have an NFT securities exchange for
type “a” NFTs.
If an auction house deals with a type “b” NFT, we posit that it shouldn’t be a security, and
therefore would automatically fall outside of the legislative ambits to be licensed as a
https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 5/75/10/2021 NFTs as Securities: A Review of Arkonis Capital’s Letter to the SEC | by James Duchenne | lootnft | Apr, 2021 | Medium
securities exchange. Baseball card swaps online platforms, E-Bay, and Craigslist are not
securities exchanges.
It, therefore, falls upon the particular nature of an NFT and the rights appurtenant
thereto to classify whether or not this is a dealing in securities. It would most certainly
be the case that if an NFT is inherently tied to profit sharing rights, rental income for,
say, a room in a building, or mineral rights for specific lots to say a few, then this would
be a security and their sale or trade would fall under the ambit of securities law.
If it is a baseball card, art work, or a sculpture (all complete and finished products) then
it would turn the definition of securities on its head through mind-boggling acrobatics.
In Loot NFT’s specific case, we work with creators that produce finished products that
we sell on consignment (or after having purchased same from them outright) in an
auction. We also allow NFTs obtained on our site to be sold by their owner in the same
manner. In both cases, the owner must contract out with us to list, pass KYC and
background checks, and sell the item.
The gamified elements we introduce drive participation and the desirability in such
creations, much like Christie’s would seek to market an item to as many auction
participants as possible. To note, no NFTs we list inherently grant a right to obtain a
revenue, an income, or a profit.
While the above is the rationale, Loot NFT will of course be very attentive to the words
of the regulators for our internal compliance.
The above is not legal advice, it is my humble take on the matter and doesn’t represent
the views of Loot NFT Co LLC.
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https://medium.com/lootnft/nfts-as-securities-a-review-of-arkonis-capitals-letter-to-the-sec-1225cc5c734a 6/75/10/2021 NFTs — The Good, the Bad, and the Ugly | by Lance Baker | lootnft | Apr, 2021 | Medium
NFTs — The Good, the Bad, and the Ugly
Lance Baker Follow
Apr 12 · 3 min read
Over the past 12 months, the newest gold rush is the NFT craze and this trend has hit
overdrive in the last 90 days. “Craze” is definitely the right word to describe what’s going
on because for those old enough to remember, all of the furor from the “dot com craze”
to the “ICO craze” to the “NFT craze” have one thing in common — the fear of missing
out (or FOMO) as it is popularly known in industry parlance.
FOMO is an interesting phenomenon and is not only driven by fear, but also by greed.
FOMO is highly contagious and isn’t just dangerous for the sick and the elderly, but can
also impact anyone of any age with a complete lack of logic and rationality and cause
them to make decisions born out of sheer emotion and euphoria.
https://medium.com/lootnft/nfts-the-good-the-bad-and-the-ugly-d44c78ccb49c 1/35/10/2021 NFTs — The Good, the Bad, and the Ugly | by Lance Baker | lootnft | Apr, 2021 | Medium
The FOMO in the Internet craze drove massive stock market valuations with companies
that had zero revenue, zero track record, and poorly designed business models simply
because they threw a “dot com” at the end of their logo. The ICO craze brought the same
kind of FOMO for the same reasons with the same results. Both crazes left many as
victims, some in jail and — whether right or wrong — some ridiculously rich.
The NFT craze has some of the same commonalities but also has revealed new markets
and opportunities not once possible without the blockchain. It has immense potential to
provide “trustless” platforms to existing markets, but has also provided an initial use
case for “starving artists.”
Now more than ever, artists around the world can monetize their passion and creativity
by either digitizing their physical creations or by channeling their talents in digital
mediums.
The first popular NFT launched on the Ethereum blockchain in 2017.
The art itself was more parody than creativity and was affectionately called
“CryptoKitties.” However, it unexpectedly revealed how powerful the concept of an NFT
was, as it became popular so quickly, that it brought the entire Ethereum blockchain to
its knees (i.e., clogged its blockchain). Some of these cartoon kitties were sold for 6
figures or more, and the fees to even buy or sell a cartoon cat cost more than the cat
itself.
Since then, the NFT marketplace has entered its next phase of growth bringing
numerous marketplaces and auctions exclusively for NFTs. This growth phase revealed
new concepts, use cases, and business models, and demonstrated that the platforms and
communities themselves are ripe for innovation.
We believe we are at the leading edge of platform innovation through our patent-
pending process that uses advanced gamification and behavioral psychology which will
level the playing field for both producers (creators) and consumers (competitors).
Over the next few articles, we are going to outline these innovations in detail to pull
back the curtain and show you why we believe that this platform is the future of NFTs.
Stay tuned and buckle up as it’s going to be a fun ride!
https://medium.com/lootnft/nfts-the-good-the-bad-and-the-ugly-d44c78ccb49c 2/35/10/2021 NFTs — The Good, the Bad, and the Ugly | by Lance Baker | lootnft | Apr, 2021 | Medium
By Lance Baker. The views that I share in this article are my own and not necessarily
represent the position of Loot NFT Co LLC, the company.
Nft Nft Collectibles Nft Marketplace Nftart Basic Topics
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https://medium.com/lootnft/nfts-the-good-the-bad-and-the-ugly-d44c78ccb49c 3/35/10/2021 Loot NFT, the “xHABN” Label and the VASS (Validator-As-A-Service) | by Suyash Sumaroo | lootnft | May, 2021 | Medium
Loot NFT, the “xHABN” Label and the VASS
(Validator-As-A-Service)
Suyash Sumaroo Follow
May 5 · 4 min read
HABN was started under the name of Horizon Africa Blockchain by Suyash Sumaroo
and Akash Balluck in 2018. It is a permissioned blockchain derived from Ethereum. Its
purpose was initially to provide fast, secure and affordable blockchain solutions focused
on powering blockchain-based projects in Africa, where cost is an important factor. To
date, the blockchain has been mostly used for test projects and education.
In 2021, in partnership with Ducorp XTM and Loot NFT, we reviewed our structure,
including the tokenomics and commercialization. As we are a permissioned network,
our target market are businesses that want simplicity, and predictable costs to utilize
blockchain solutions, or to create their “own” blockchain to cater for their activities. This
lead our initial mission to be expanded to not only cater for our Africa focus, but also to
businesses and projects anywhere that find what we’ve built useful.
The “by HABN”, or “xHABN” for short, works as follows:
https://medium.com/lootnft/loot-nft-and-the-xhabn-label-5955cf9cb15b 1/45/10/2021 Loot NFT, the “xHABN” Label and the VASS (Validator-As-A-Service) | by Suyash Sumaroo | lootnft | May, 2021 | Medium
(a) Blockchain transactions are all done through API calls. We offer packages in 3 tiers
each having a set number of API calls customers can consume for a fixed price per
month. We also offer custom packages under a “price on application” option. This is
quite common for the software industry.
(b) Customers get to design and build their own activities, create their own tokens,
smart contracts, NFTs, wallets, etc. Each time an API call is made a transaction is
recorded and retrieved. They can thus have the full power of the underlying persistence
and reading of the blockchain elements they need.
In the background, out of sight of the customer a number of things happen.
But first for context, HABN is a validator network for customers wanting to use or create
their “own” permissioned-blockchain. A useful analogy here is that of a shared server
containing multiple applications (for e.g., like the one offered by Bluehost); it is the
blockchain solution of the client but the validation service on the network is provided by
HABN.
Now the meat of it:-
(a) We have 15 validators that earn HABX, the native currency of HABN that is only
used as an accounting currency by HABN. It is not traded anywhere.
(b) For every 500,000 blocks mined, the validators can burn the HABX they’ve been
rewarded with in return for an HABX Share Certificate (HSC for short). The HSC is a
pro-rata share of their HABX burnt to that of all HABX burnt by all other validators at
that time. 100 HSCs are provided for each 500,000 blocks and distributed to each
validator according to their pro-rata share.
For e.g, if Validators 1, 2, 10, 15 were rewarded with 1,000, 2,000, 3,000, 4,000 HABXs
that were burnt only by them, then they would respectively get 10 HSCs, 20 HSCs, 30 HSCs,
and 40 HSCs. HSCs entitle them to a share of revenues from a pool made up of customer
payments for that 500,000 blocks. This pool is divided by 100 HSCs, such that for example
if the pool is 1,000 ADA, presenting and retiring 10 HSCs, would give the validator 100 ADA
for their work.
https://medium.com/lootnft/loot-nft-and-the-xhabn-label-5955cf9cb15b 2/45/10/2021 Loot NFT, the “xHABN” Label and the VASS (Validator-As-A-Service) | by Suyash Sumaroo | lootnft | May, 2021 | Medium
(c) If validators do not burn their HABX, this is accumulated and they get to burn it at
any 500,000 block intervals; this also mean that validators may burn part of their HABX.
For e.g., if they don’t burn and there are more clients in the subsequent lot of 500,000
blocks, they stand to receive more out of the pool (since their share might be greater
than others that previously burnt theirs). The reverse is also possible.
(d) The pool may be in any currency and the administrative personnel of HABN converts
all other currencies into ADA, the Cardano Native Currency to pay the validators
pursuant to their HSCs.
(e) The HABX is never handled by the customer or even seen in the customer’s wallet
although it powers their transactions.
(f) The HABN blockchain infrastructure is highly flexible and can cater for the minting
of NFTs, issuance of multiple tokens, and has the relevant APIs for a multitude of
integrations and use cases.
Our first VASS (validator-As-A-Service) is for the LNFTxHABN blockchain. We’ve issued
the M-BUN token, which is a mirror of the BUN token minted on the Cardano
blockchain, to audit and record transactions within the Loot NFT ecosystem.
LNFTxHABN is also expected to cater for high velocity bidding transactions when it
meshes with the Cardano blockchain in the future through a bi-directional bridge.
See the minted M-BUNs here on HABNScan:
0xbb6f7ff2e38ccb68898569e31248fd8e2c3a4b4b
We intend to keep the label “xHABN” for any blockchain validator services we provide in
the future (for example, COMPANYxHABN, etc.).
To note, we will also mint the NFTs for Loot NFT on LNFTxHABN and then burn them
when a member requests to send it off Loot NFT. At that time, a newly issued NFT will be
minted on the owner’s blockchain of choice (i.e., those available on the Loot NFT
platform) together with the provenance information previously recorded in
LNFTxHABN.
Disclaimer: Horizon Africa, Codevigor, Loot NFT and Ducorp XTM are validators of HABN.
https://medium.com/lootnft/loot-nft-and-the-xhabn-label-5955cf9cb15b 3/45/10/2021 Loot NFT: The Launch Timeline. This article outlines the timeline of… | by Lance Baker | lootnft | Apr, 2021 | Medium
Loot NFT: The Launch Timeline
Lance Baker Follow
Apr 19 · 3 min read
This article outlines the timeline of our open membership intake ending on 10 July
2021, and the early-bird benefits during each of our sign up stages.
Note: Although BUNs are limited to 500m, there is no cap to the amount of BUNs available
for sale in each sign up stage of the open membership intake. However, BUNs sold are
recirculated back to Loot NFT based on member activity on its platform; therefore, BUNs
may only be available following that recirculation (thereby limiting the amounts of BUNs
available for purchase if you sign up in stages 2 and 3). For an in-depth overview of the
intake process see this article.
Open Membership Email Registrations
Anyone can register (i.e., whitelist) their email address before 30 June 2021 to sign up
at any time in the future. However, there are three sign up stages between 1 June and
10 July 2021 where those that have whitelisted their email addresses before 30 June can
https://medium.com/lootnft/loot-nft-the-launch-timeline-c7d49cd413c 1/45/10/2021 Loot NFT: The Launch Timeline. This article outlines the timeline of… | by Lance Baker | lootnft | Apr, 2021 | Medium
sign up to get various member benefits. To note, a required step to sign up to Loot NFT is
the purchase of BUNs.
[A] Stage 1
Anyone that whitelists their email address prior to 30 May 2021 can sign up between 1
and 7 June 2021.
The Benefits
Those that sign up in stage 1 receive several badges with associated benefits in addition
to 1 bonus BUN for every BUN purchased.
Pioneer Badge
All Pioneer badge holders can get a 10% commission in USDC for every purchase their
invitees make up to 31 December 2022. Only 500 Pioneer badges will be given on a first
come, first served basis. Conditions apply.
Referral Bonus
Members who invite others will receive 5 BUNs for each 25 BUN pack purchased on
their invitee’s first purchase up to 31 December 2022.
Lifetime Free NFT Re-listing
Loot NFT charges a fee to re-list NFTs for auction from a member that previously won
that NFT in an auction (currently, 250 BUNs). This fee is waived for holders of this
badge.
[B] Stages 2 and 3
Stage 2 is for members signing up between 7–30 June 2021. This is only open to those
that have whitelisted their email addresses by 6 June 2021. Members that sign up
receive 10 bonus BUNs for every 25 BUNs purchased.
Stage 3 is for members signing up between 1–10 July 2021. This is only open to those
that have whitelisted their email addresses by 30 June 2021.
https://medium.com/lootnft/loot-nft-the-launch-timeline-c7d49cd413c 2/45/10/2021 Loot NFT: The Launch Timeline. This article outlines the timeline of… | by Lance Baker | lootnft | Apr, 2021 | Medium
Members signing up in these stages do not receive the Pioneer badge.
The Benefits
Members in Stage 2 receive the same badges as in stage 1 to the exception of the Pioneer
badge.
Members in Stage 3 receive the same badges as in stage 2, except that they do not get
any bonus BUNs for their first purchase.
[C] Invite Only Period
People that have whitelisted their email addresses prior to 30 June 2021 can sign up at
any time in the future.
On the other hand, anyone that has not whitelisted their email address prior to 30 June
2021 won’t be able to sign up without an invite (i.e., members whitelisting their email
addresses).
Below is a detailed timeline together with the sign up Stage benefits.
https://medium.com/lootnft/loot-nft-the-launch-timeline-c7d49cd413c 3/45/10/2021 Loot NFT: The Launch Timeline. This article outlines the timeline of… | by Lance Baker | lootnft | Apr, 2021 | Medium
In summary, the timeline is straightforward. The earlier you whitelist your email address
and sign up, the better the benefits.
Nft Nft Collectibles Nft Marketplace Basic Topics Launch
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https://medium.com/lootnft/loot-nft-the-launch-timeline-c7d49cd413c 4/45/10/2021 Loot NFT Press Release. 5 May 2021. | by James Duchenne | lootnft | May, 2021 | Medium
Loot NFT Press Release. 5 May 2021.
James Duchenne
May 5 · 2 min read
Loot NFT is a gamified auction platform where members bid for NFTs using BUNs, a
token of limited supply (only 500m will ever be issued). Membership is by invitation
only outside of the early-bird membership registrations ending 30 June 2021.
Each NFT commissioned from creators is unique (one of one) and part of themed set of
5.
Members get degrees (i.e., status levels giving rewards) by collecting NFTs in a set. The
goal is to get to the 5th degree. A full NFT set collected unlocks a jaw-dropping mystery
gift.
All auctions are time-limited and occur in a pay-to-bid manner where members bid one
https://medium.com/lootnft/loot-nft-press-release-5-may-2021-6f212cbc7bca 1/35/10/2021 Loot NFT Press Release. 5 May 2021. | by James Duchenne | lootnft | May, 2021 | Medium
BUN at a time in the auction “arena”. If a bid is received in the last 15 seconds, the timer
resets back to 15 seconds. The last member to bid when the timer expires gets the NFT.
Thus, auctions could last hours or days, or longer and is termed “Battle-Bidding”.
Each BUN spent is directed to a time-locked wallet called the Oven which empties BUNs
back into the ecosystem once a week on Sunday (20% as rewards to members and 80%
to Loot NFT for resale to members). However, BUNs bid in auctions are trapped until the
auction concludes, at which time BUNs collected for that auction are sent to the Oven.
Since BUNs are limited in number, when they’re spent, their circulating supply
decreases, meaning that members must bid very strategically.
In multiple live auction scenarios, it is possible that all BUNs, except a few, are left in
circulation (meaning that all other members are spectators). Therefore, the remaining
members holding BUNs can win the NFT. Members can re-list NFTs they’ve won for
auction and get paid in USDC; BUNs are accounting units used to assess the USDC value
of the sold NFT.
Members holding NFTs in a set to get a degree create a de-facto NFT “staking” reducing
the availability of NFTs at auctions. Once achieved a degree can’t be lost. Therefore,
members can resell NFTs that they previously used to get degrees.
The BUN is a blockchain-based token minted on the LNFTxHABN permissioned
blockchain environment and the Cardano Blockchain. In the future, Loot NFT intends to
use a bi-directional bridge between both blockchains to decentralize the modules of its
ecosystem to create a decentralized autonomous organization.
BUNs are sold in packs of 25 for 5 USDC. In the future, they intend to be sold for ADA,
Cardano’s blockchain native currency.
Membership to Loot NFT is by invitation only.
The Loot NFT model is a gamification tour-de-force for which it filed a provisional
patent, and like the NFTs it lists, it is unique.
5 May 2021. Loot NFT Co LLC, Wyoming.
https://medium.com/lootnft/loot-nft-press-release-5-may-2021-6f212cbc7bca 2/35/10/2021 Effects of the Paywall on First-Time Listings for Auction | by James Duchenne | lootnft | Apr, 2021 | Medium
Effects of the Paywall on First-Time Listings for
Auction
James Duchenne
Apr 12 · 2 min read
Members must pay in BUNs to join an auction. Here’s why.
NFTs are listed for time-limited auction (in pay-to-bid style) that have an end time. Up to
6 hours before the end time, members can join an auction by spending 5 BUNs. This is
accounted for as their first bid. Thereafter, they spend 1 BUN at a time to bid and they
can’t outbid themselves.
A bid received in the last 15 seconds of the auction resets the timer back to 15 seconds.
Therefore, auctions can last for hours or days in “extra time” (i.e., the time beyond the
end time where an auction remains live).
https://medium.com/lootnft/effects-of-the-paywall-on-first-time-listings-for-auction-ea4055dcda29 1/35/10/2021 Effects of the Paywall on First-Time Listings for Auction | by James Duchenne | lootnft | Apr, 2021 | Medium
The first reason to set up a paywall (i.e., the fee members must pay to have a seat at the
auction table) is that it functions as an incentive to join early. At the same time, this
seeds the auction with participants and crowdsourced bids (since paywall amounts get
added to the auction receipts for an NFT).
When there is less than 6 hours to the end time, the paywall doubles to 10 BUNs, and
keeps doubling every 6 hours of extra time thereafter (although bidding continues for
members that joined previously). Hence, it gets costlier to join an auction as time goes
by. This self-regulates the number of members that participate in an auction since
doubling the joining fee quickly reaches a large amount, pricing out most members.
Impact of the paywall on participation from the population of members
As a member’s account is capped at 50,000 BUNs, at some point, the doubling of the
paywall means that no new participants can get in that auction since the paywall would
https://medium.com/lootnft/effects-of-the-paywall-on-first-time-listings-for-auction-ea4055dcda29 2/35/10/2021 Effects of the Paywall on First-Time Listings for Auction | by James Duchenne | lootnft | Apr, 2021 | Medium
be more than that cap (about 78 hours after the start of the paywall doubling).
Below is a graph of the profile of BUNs collected at auctions over time.
This graph is particular to the battle bidding auction scenario
We’re happy to answer any questions here.
Loot NFT.
Nft Auctions In Depth Topics Paywall Battle Bidding
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https://medium.com/lootnft/effects-of-the-paywall-on-first-time-listings-for-auction-ea4055dcda29 3/35/10/2021 Considerations for the Open Membership Intakes | by James Duchenne | lootnft | Apr, 2021 | Medium
Considerations for the Open Membership
Intakes
James Duchenne
Apr 19 · 5 min read
I wanted to pre-empt some questions regarding our membership intake mechanics.
While there’s nothing usual about how we’re launching Loot NFT, it isn’t a complex
topic.
A few foundational matters (as of the date of this article):
(a) Loot NFT is an invite-only membership platform. At launch, we have an open e-mail
whitelisting period (meaning, anyone can whitelist their email addresses to sign up in
the future).
https://medium.com/lootnft/considerations-for-the-open-membership-intakes-3214cc5d4ca2 1/65/10/2021 Considerations for the Open Membership Intakes | by James Duchenne | lootnft | Apr, 2021 | Medium
(b) The open whitelisting period ends on June 30, 2021 23:59 UTC and depending on
when someone whitelists their email address, they will have access to different benefits.
The early-birds get better benefits.
(c) There are 3 sign up stages as follows. People that whitelist their email addresses
before:
(i) 30 May 2021 23:59 UTC can sign up between 1–7 June 2021;
(ii) 6 June 2021 23:59 UTC can sign up between 7–30 June 2021; and
(iii) 30 June 2021 23:59 UTC can sign up at any time in the future, but get additional
benefits if they sign up between 1–10 July 2021.
(c) A required step of signing up is for members to have BUNs in their account. This
means that no one can log in without first buying BUNs.
(d) After 10 July 2021, membership will be by invitation only. To invite someone to join,
members must spend 1 BUN (currently) to whitelist their invitees e-mail address. At the
time of signing up, our system will check whether, (i) the invitee’s e-mail address is
whitelisted, (ii) the referrer (person that whitelisted the e-mail address) has at least 1
BUN in their account, and (iii) that there are BUNs available to sell to the invitee. All
three checks must be true for the invitee to join.
(e) Members can start inviting others starting 10 July 2021 (00:00 UTC). The KYC,
public address whitelisting, and contract signing will also be enabled after that time.
(f) BUNs are limited in number at 500,000,000 BUNs available for purchase in packs of
25 (for 5 USDC). There are no allocations of BUNs for any of the sign up stages, which
makes it possible that members wanting to sign up can’t do so because we don’t have
BUNs to sell at that time.
(g) No member can have more than 50,000 BUNs in their account (subject to revisions
in the future);
(h) Based on member participation on Loot NFT (i.e., bidding at auctions, etc.), BUNs
are sent to the Oven and 80% recirculates back to Loot NFT every Sunday 00:00 UTC
https://medium.com/lootnft/considerations-for-the-open-membership-intakes-3214cc5d4ca2 2/65/10/2021 Considerations for the Open Membership Intakes | by James Duchenne | lootnft | Apr, 2021 | Medium
when the Oven redistributes BUNs to the ecosystem. This provides Loot NFT BUNs to sell
to members at that time. This also automatically regulates membership intakes over
time.
Let’s look at some possible scenarios of this design.
“Max” Scenario
All BUNs are sold between 1–7 June 2021.
This means that unless an auction concludes and the Oven redistributes a significant
amount of BUNs, very few new members can sign up.
Note: We may introduce a cap on BUN purchasing per member for the stage 1 intake period
where this is deemed appropriate. Whitelisted persons will be advised of this on 30 May
2021.
https://medium.com/lootnft/considerations-for-the-open-membership-intakes-3214cc5d4ca2 3/65/10/2021 Considerations for the Open Membership Intakes | by James Duchenne | lootnft | Apr, 2021 | Medium
Sign ups in stage 2 and 3 are entirely dependent on the amount of BUNs the Oven
distributes during that time. Hence, sign ups may be extremely limited in a “max”
scenario or not possible at all. However, those that have whitelisted their e-mail address
before 30 June can sign up at any time after the Oven empties (i.e., when Loot NFT has
BUNs to sell).
The graph shows a small drop in the circulating supply to account for Oven distributions out
of some non-bidding member activities on the platform. At some point, it is expected that an
auction concludes and fills up the Oven, which then distributes on Sunday at 00:00 UTC.
New people can then buy BUNs to sign up.
Note that while people are signing up after 7 June, members can also buy BUNs as long as
their accounts do not reach the maximum account limit of 50,000 BUNs. Why the limit?
Simply put, because hyper-concentration of BUNs in the hands of a few affects engagement
around NFTs on auction.
“Variant” Scenario
Only a portion of BUNs are sold between 1–7 June 2021. In that case, any whitelisted e-
mail address can be used to sign up.
“D-Day” Scenario
Below we look at the effect of D-Day (a theoretical event where all BUNs are locked in
the Oven and all members wait for it to redistribute BUNs back into the ecosystem to log
in and participate again).
https://medium.com/lootnft/considerations-for-the-open-membership-intakes-3214cc5d4ca2 4/6You can also read
